What the changes say
- New risks cover AI adoption, tariffs affecting imported parts and vehicles, and broader economic uncertainty.
- Investment risk has increased as the portfolio diversified into corporate bonds, Treasuries, mortgage-backed securities, and equities.
- Insurance growth now emphasizes scaling infrastructure, pricing accuracy, reserve adequacy, and regulatory complexity in new markets.
What changed since the prior 10-K
New
- NewRisks Related to Our Business
We believe our growth depends on our ability to
Growth depends on retaining and adding Members, expanding geographically, launching products, and avoiding pricing or offering changes that reduce demand.
- NewRisks Related to Our Business
Like others in our industry, we face potential exposures to operational disruptions caused by cyber breaches or resiliency failures impacting us or third party technology providers upon whom we rely, which could impair website availability and crucial technology operations
Cyberattacks or failures at Hagerty or third-party technology providers could disrupt websites, systems, data security, and operations.
- NewRisks Related to Our Business
Rapid evolution and adoption of artificial intelligence could adversely affect our competitive position, operations, and brand
Competitors’ faster AI adoption, flawed outputs, data-rights issues, security failures, or evolving regulation could damage Hagerty’s competitiveness and reputation.
- NewRisks Related to Our Business
From time to time we introduce new products and services that have limited operating history, making it difficult to forecast operating results. We may not achieve profitability from these offerings as quickly as anticipated, or at all
New products and services may face weak demand, defects, supply or vendor problems, delayed profitability, or losses.
- NewRisks Related to Our Business
Current economic conditions including inflation and interest rate uncertainty may affect demand for our products and services
Inflation, interest rates, unemployment, and market volatility could reduce discretionary spending on collector vehicles and increase borrowing or capital-raising costs.
- NewRisks Related to Our Business
The imposition of tariffs on imported goods could increase costs, reduce consumer spending on collector cars and related services, and negatively impact our business, financial condition, and results of operations
Tariffs could raise imported parts and vehicle costs, increase claims expenses, reduce customer satisfaction, and weaken Marketplace demand.
- NewRisks Related to Our Business
Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results
Diversification into corporate bonds, Treasuries, mortgage-backed securities, and equities exposes Hagerty’s investment portfolio to market and interest-rate losses.
- NewRisks Related to Our Insurance Segment
Rapid growth may strain our infrastructure, resources, and relationships, which could then impair service quality, operational execution, and financial performance of our Insurance segment
Rapid Insurance segment growth could overwhelm technology, underwriting, claims, compliance, controls, and personnel, causing service failures or regulatory penalties.
- NewRisks Related to Our Insurance Segment
If we do not price and underwrite risks accurately at competitive, profitable rates, the business and financial condition of our Insurance segment could be adversely affected
Inaccurate risk assessment or pricing could leave Insurance premiums insufficient to cover losses, while regulations may restrict price increases or non-renewals.
- NewRisks Related to Our Insurance Segment
Hagerty Re's ultimate loss liability could exceed our loss and loss adjustment expense reserves, materially adversely affecting the financial condition and results of operations of our Insurance segment
Hagerty Re’s reserves may underestimate ultimate reported and incurred-but-not-reported claims and related settlement expenses.
- NewRisks Related to Our Insurance Segment
We believe that the growth of the business and revenue of our Insurance segment depends in part upon our ability to expand into different jurisdictions and accurately project profitability
Insurance expansion into new jurisdictions and products may be slower, less profitable, or harder to price accurately amid unfamiliar competition and regulation.
- NewRisks Related to Our Marketplace Segment
Expansion into new markets exposes our Marketplace segment to complex, inconsistent global regulations and higher compliance costs, which may result in disruption to our ongoing businesses
Broad Arrow’s international expansion brings inconsistent rules on auctions, vehicles, taxes, sanctions, privacy, payments, licensing, and consumer protection.
- NewRisks Related to Ownership of Our Securities
Our entry into the Markel Fronting Arrangement will reduce our reported commission revenue and ceding commission expense beginning in 2026 and reduce period‑to‑period comparability of our Consolidated Financial Statements
- NewRisks Related to Ownership of Our Securities
Our entry into the Markel Fronting Arrangement may not result in the commercial benefits we are expecting
- NewRisks Related to Tax
We are subject to VAT and other indirect tax laws in multiple jurisdictions, and the complexity and interpretation of these rules could result in additional tax liabilities and compliance costs
Dropped
- DroppedRisks Related to Our Business
Some of our membership and marketplace products and services are newer and have limited operating history, which makes it difficult to forecast operating results. We may not show profitability from these newer products as quickly as we anticipate or at all
- DroppedRisks Related to Our Business
Rising inflation and interest rates may affect demand for our products and services
- DroppedRisks Related to Our Business
Rising interest rates increase our cost of borrowing and could adversely affect our results of operations
- DroppedRisks Related to Our Business
Our results of operations depend, in part, on the performance of our investment portfolio. We seek to hold a portfolio of investments in accordance with our investment policy, which is routinely reviewed by our Investment Committee
- DroppedRisks Related to Our Insurance Products and Services
If the risks within the insurance programs that we offer are not priced and underwritten accurately with competitive, yet profitable, rates, our business and financial condition could be adversely affected
- DroppedRisks Related to Our Insurance Products and Services
Hagerty Re's actual ultimate loss liability could potentially be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations
- DroppedRisks Related to Our Insurance Products and Services
Our expansion into different insurance products and jurisdictions may subject us to additional costs and expenses, and our plans might not be as profitable as projected
- DroppedRisks Related to Our Insurance Products and Services
Our reliance on technology and intellectual property from third parties for pricing and underwriting insurance policies, handling claims, and maximizing automation, could cause an adverse impact on our business and operations if these third parties become unavailable or provide us with inaccurate information
Limited operating histories of newer membership and Marketplace products made results and profitability difficult to forecast.
- DroppedRisks Related to Our Marketplace Business
Our growth strategy involves the development and expansion of our marketplace offerings, and if we are unable to realize the anticipated benefits from their growth and integration with our other businesses, our business, financial condition and results of operations could be materially and adversely affected
- DroppedRisks Related to Our Marketplace Business
The limited operating history of BAC may not represent BAC's future operating results, as minimal loan losses on the BAC loan portfolio to date may not be indicative of future loan loss experience and our ability to realize proceeds from the sale of collateral for BAC loans may be delayed or limited
Inflation and higher interest rates could reduce consumer spending on collectible cars and related services.
- DroppedRisks Related to Ownership of Our Securities
Our stock may be diluted by future issuances of additional Hagerty, Inc. Class A Common Stock ("Class A Common Stock") in connection with our incentive plans, acquisitions or otherwise; future sales of such shares in the public market or the expectations that such sales may occur could lower our stock price
Higher interest rates could increase borrowing costs and make equity or debt financing less accessible.
Reworded
- 100% rewrittenRisks Related to Our Business
We have experienced significant Member growth in recent years. Our business and revenue growth depend on our ability to continuously attract and retain Members, which we cannot assure, and Member retention may decline
The heading now emphasizes recent Member growth and the possibility that retention may decline, while the prior detailed growth levers are absent.
Was: We have experienced significant Member growth over the past several years, and our continued business and revenue growth are dependent on our ability to continuously attract and retain Members and we cannot be sure we will be successful in these efforts, or that Member retention levels will not materially decline
- 100% rewrittenRisks Related to Our Marketplace Segment
Changes to tax laws may affect the volume of collector car and enthusiast vehicle inventory available for our Marketplace segment and increase our compliance risks
The risk shifts from general tax effects on collector inventory to Marketplace collection obligations, online-platform rules, compliance scrutiny, and transaction friction.
Was: Changes to tax laws may affect the volume of collector vehicle inventory available for our marketplace business, and increase our compliance risks
- 83% rewrittenRisks Related to Ownership of Our Securities
Substantial blocks of our total outstanding shares may be sold into the market. If there are substantial sales of shares of our Class A Common Stock, the price of our Class A Common Stock could decline
The update adds potential future secondary offerings and increases reported Class A shares outstanding from 90,040,663 to 101,066,533.
- 83% rewrittenRisks Related to Our Business
We may not be able to prevent or address the misappropriation of Hagerty-owned data or websites
The risk adds potentially significant time and expense, resource diversion, and difficulty stopping copycat sites or applications.
Was: We may not be able to prevent or address the misappropriation of Hagerty-owned data
- 80% rewrittenRisks Related to Our Business
Future acquisitions or investments contain inherent strategic, execution, and compliance risks that could disrupt our business and harm our financial condition
The acquisition examples remain, but the wording removes “recently” and “worse” and more neutrally describes execution, liability, tax, and regulatory risks.
- 67% rewrittenLegal, Regulatory and Political Risks
Complex legal, regulatory, and contractual requirements regarding data privacy and cybersecurity may impact how we market and interact with existing and future Members, and could have an adverse effect on our business, financial condition, and operations
The update adds restrictions on communications and data use, higher compliance costs, reduced acquisition and retention effectiveness, and indemnification exposure.
Was: Complex legal, regulatory, and contractual requirements regarding data privacy and cybersecurity may impact how we interact with our insurance customers and how we market to future Members, and could have an adverse effect on our business, financial condition and operations
- 55% rewrittenRisks Related to Our Business
Our future success depends on our ability to continue to develop and implement technology to transform or replace legacy technology, and to maintain the security and confidentiality of our legacy technology, each in compliance with evolving privacy and cybersecurity laws
No substantive change; the prior-year and current-year text are identical.
- 53% rewrittenRisks Related to Our Marketplace Segment
Our Marketplace segment could be exposed to losses in the event of title, authenticity or other claims related to damage or theft
The description now expressly includes drivetrain authenticity, alongside chassis and vehicle identification numbers, as a potential claim area.
Was: We could be exposed to losses in the event of title, authenticity or other claims related to damage or theft
- 45% rewrittenRisks Related to Our Insurance Segment
The insurance business, including the market for property and casualty insurance, is historically cyclical in nature, and there may be periods with excess underwriting capacity and unfavorable premium rates, which could adversely affect our Insurance segment
Was: The insurance business, including the market for property and casualty insurance, is historically cyclical in nature, and there may be periods with excess underwriting capacity and unfavorable premium rates, which could adversely affect our business
- 40% rewrittenRisks Related to Our Marketplace Segment
Competition in the global market for sales of collector cars and enthusiast vehicles and the variability of the value, demand and availability of quality collector cars for sale may adversely impact the business, financial condition, and results of operations of our Marketplace segment
Was: Competition in the global collector car sales market and the variability of the value, demand and availability of quality collector cars for sale may adversely impact the business, results of operations, and financial condition of our marketplace business
- 39% rewrittenRisks Related to Our Business
We may not be able to prevent, monitor, or detect fraudulent activity, including transactions with insurance policies or payments of claims as well as transactions through our Marketplace segment
Was: We may not be able to prevent, monitor, or detect fraudulent activity, including transactions with insurance policies or payments of claims as well as transactions through our marketplace business
- 38% rewrittenRisks Related to Our Insurance Segment
Our MGA subsidiaries do business with a limited number of key underwriting carrier partners in our insurance markets, and we may not be able to find suitable replacements for our existing carriers
Was: Our MGAs do business with a limited number of key underwriting carrier partners in our insurance markets, and we may not be able to find suitable replacements for our existing carriers
- 38% rewrittenRisks Related to Our Business
A large percentage of our Insurance segment products and services are distributed through a few relationships and the loss of business provided by any one of them could have an adverse effect on us
Was: A large percentage of our products and services are distributed through a few relationships and the loss of business provided by any one of them could have an adverse effect on us
- 37% rewrittenRisks Related to Our Insurance Segment
Our Insurance segment operates in a highly regulated environment for insurance product distribution and faces risks associated with compliance requirements, some of which cause us to make judgments that could have an adverse effect on us
Was: We operate in a highly regulated environment for our insurance product distribution and face risks associated with compliance requirements, some of which cause us to make judgments that could have an adverse effect on us
- 37% rewrittenRisks Related to Ownership of Our Securities
Under the 2021 Stock Incentive Plan
- 35% rewrittenRisks Related to Our Insurance Segment
The underwriting companies that we work with, Driver's Edge, and our MGA subsidiaries are periodically subject to examinations and audits by insurance regulators, which could result in adverse findings, enforcement actions, require payments of fines or penalties, and necessitate remedial actions
Was: The underwriting companies that we work with, and our insurance agencies, are periodically subject to examinations and audits by insurance regulators, which could result in adverse findings, enforcement actions, require payments of fines or penalties, and necessitate remedial actions
- 34% rewrittenRisks Related to Ownership of Our Securities
Under the 2021 Employee Stock Purchase Plan
- 33% rewrittenRisks Related to Tax
Hagerty, Inc. is a holding company, whose only material asset is its interest in THG. Hagerty, Inc. depends on THG distributions to pay taxes, make payments under the TRA, and pay other expenses
Was: We are a holding company, and our only material asset is our interest in THG, and we will therefore be dependent upon distributions made by THG to pay taxes, make payments under the TRA and pay other expenses
- 30% rewrittenRisks Related to Our Business
Our future growth and profitability may be affected by new entrants into the market or current competitors developing preferred offerings
- 29% rewrittenRisks Related to Our Insurance Segment
Unexpected increases in the frequency or severity of claims may adversely affect the operations of our Insurance segment and our financial condition
Was: Unexpected increases in the frequency or severity of claims may adversely affect our operations and financial condition
- 28% rewrittenRisks Related to Our Insurance Segment
Severe weather events, catastrophes, and unnatural events are unpredictable, and we may experience losses or disruptions from these events
- 27% rewrittenRisks Related to Ownership of Our Securities
Under the Contribution and Exchange Agreement
- 26% rewrittenRisks Related to Our Business
We are subject to payment processing risks which could adversely affect our results of operations
- 26% rewrittenRisks Related to Our Insurance Segment
Hagerty Re is subject to regulatory requirements to maintain its license in Bermuda as a Class 3A insurer
- 21% rewrittenRisks Related to Our Business
Changes to the law and social attitudes towards petroleum-powered vehicles may make ownership of collector vehicles less desirable, leading to a decline in demand for our products and services
- 21% rewrittenRisks Related to Our Insurance Segment
The reinsurance Hagerty Re purchases to protect against catastrophic and large losses may become unavailable on current coverage terms, limits, or pricing
Was: The reinsurance that Hagerty Re purchases to protect against catastrophic and large losses may be unavailable at current coverage terms, limits, or pricing
- 20% rewrittenRisks Related to Ownership of Our Securities
Under the Securities Purchase Agreement
All 68 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business
- 01We have experienced significant Member growth in recent years. Our business and revenue growth depend on our ability to continuously attract and retain Members, which we cannot assure, and Member retention may decline100% rewritten
- 02We believe our growth depends on our ability toNew
- 03A large percentage of our Insurance segment products and services are distributed through a few relationships and the loss of business provided by any one of them could have an adverse effect on us38% rewritten
- 04We may not be able to prevent, monitor, or detect fraudulent activity, including transactions with insurance policies or payments of claims as well as transactions through our Marketplace segment39% rewritten
- 05Like others in our industry, we face potential exposures to operational disruptions caused by cyber breaches or resiliency failures impacting us or third party technology providers upon whom we rely, which could impair website availability and crucial technology operationsNew
- 06Our technology platforms may not function properly, which might subject us to loss of business and revenue, breach of contractual obligations, and place us out of compliance with state and federal rules and regulations
- 07Our future success depends on our ability to continue to develop and implement technology to transform or replace legacy technology, and to maintain the security and confidentiality of our legacy technology, each in compliance with evolving privacy and cybersecurity laws55% rewritten
- 08We may not be able to prevent or address the misappropriation of Hagerty-owned data or websites83% rewritten
- 09Rapid evolution and adoption of artificial intelligence could adversely affect our competitive position, operations, and brandNew
- 10We rely on our Chief Executive Officer and other key employees. If we cannot attract, retain, or motivate key personnel, our business may be severely impacted
- 11Our unique culture has contributed to our success, and if we are not able to maintain this culture in the future, our business could be harmed
- 12Our future growth and profitability may be affected by new entrants into the market or current competitors developing preferred offerings30% rewritten
- 13Future acquisitions or investments contain inherent strategic, execution, and compliance risks that could disrupt our business and harm our financial condition80% rewritten
- 14From time to time we introduce new products and services that have limited operating history, making it difficult to forecast operating results. We may not achieve profitability from these offerings as quickly as anticipated, or at allNew
- 15We are subject to payment processing risks which could adversely affect our results of operations26% rewritten
- 16Current economic conditions including inflation and interest rate uncertainty may affect demand for our products and servicesNew
- 17The imposition of tariffs on imported goods could increase costs, reduce consumer spending on collector cars and related services, and negatively impact our business, financial condition, and results of operationsNew
- 18Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial resultsNew
- 19Changes to the law and social attitudes towards petroleum-powered vehicles may make ownership of collector vehicles less desirable, leading to a decline in demand for our products and services21% rewritten
- 20We may require additional capital in the future, which may not be available or may only be available on unfavorable terms, and we may encounter difficulty in obtaining funds to meet our commitments
- 21Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at a similar rate, if at all
Risks Related to Our Insurance Segment
- 22The insurance products that we develop and sell for our underwriting carriers are subject to regulatory approval, and we may incur significant expenses in connection with the development and filing of new products before revenue is generated from new products
- 23Our Insurance segment operates in a highly regulated environment for insurance product distribution and faces risks associated with compliance requirements, some of which cause us to make judgments that could have an adverse effect on us37% rewritten
- 24Unexpected increases in the frequency or severity of claims may adversely affect the operations of our Insurance segment and our financial condition29% rewritten
- 25Severe weather events, catastrophes, and unnatural events are unpredictable, and we may experience losses or disruptions from these events28% rewritten
- 26We may not be able to adapt effectively and timely to any changes in law
- 27Our MGA subsidiaries do business with a limited number of key underwriting carrier partners in our insurance markets, and we may not be able to find suitable replacements for our existing carriers38% rewritten
- 28Rapid growth may strain our infrastructure, resources, and relationships, which could then impair service quality, operational execution, and financial performance of our Insurance segmentNew
- 29A regulatory environment that requires rate increases to be approved and that can dictate underwriting and pricing and mandate participation in loss sharing arrangements may adversely affect our financial condition and the results of operations of our Insurance segment
- 30The underwriting companies that we work with, Driver's Edge, and our MGA subsidiaries are periodically subject to examinations and audits by insurance regulators, which could result in adverse findings, enforcement actions, require payments of fines or penalties, and necessitate remedial actions35% rewritten
- 31The insurance business, including the market for property and casualty insurance, is historically cyclical in nature, and there may be periods with excess underwriting capacity and unfavorable premium rates, which could adversely affect our Insurance segment45% rewritten
- 32The reinsurance Hagerty Re purchases to protect against catastrophic and large losses may become unavailable on current coverage terms, limits, or pricing21% rewritten
- 33If we do not price and underwrite risks accurately at competitive, profitable rates, the business and financial condition of our Insurance segment could be adversely affectedNew
- 34Reinsurance subjects Hagerty Re to counterparty risk if reinsurers fail to pay or timely pay claims due to insolvency or otherwise fail to honor their obligations
- 35Unexpected changes in the interpretation of coverage or provisions, including loss limitations and exclusions, in the insurance policies we sell and service could have a material adverse effect on the financial condition and operations of our Insurance segment
- 36Hagerty Re's ultimate loss liability could exceed our loss and loss adjustment expense reserves, materially adversely affecting the financial condition and results of operations of our Insurance segmentNew
- 37We believe that the growth of the business and revenue of our Insurance segment depends in part upon our ability to expand into different jurisdictions and accurately project profitabilityNew
- 38Our failure to accurately and timely pay claims on our insurance programs could have an adverse impact on the business, financial condition and prospects of our Insurance segment
- 39A downgrade in the financial strength rating of the carriers on our insurance programs may adversely affect our ability to conduct business as currently conducted
- 40Hagerty Re is subject to regulatory requirements to maintain its license in Bermuda as a Class 3A insurer26% rewritten
Risks Related to Our Marketplace Segment
- 41Expansion into new markets exposes our Marketplace segment to complex, inconsistent global regulations and higher compliance costs, which may result in disruption to our ongoing businessesNew
- 42Competition in the global market for sales of collector cars and enthusiast vehicles and the variability of the value, demand and availability of quality collector cars for sale may adversely impact the business, financial condition, and results of operations of our Marketplace segment40% rewritten
- 43Our Marketplace segment could be exposed to losses in the event of title, authenticity or other claims related to damage or theft53% rewritten
- 44Changes to tax laws may affect the volume of collector car and enthusiast vehicle inventory available for our Marketplace segment and increase our compliance risks100% rewritten
Legal, Regulatory and Political Risks
- 45Complex legal, regulatory, and contractual requirements regarding data privacy and cybersecurity may impact how we market and interact with existing and future Members, and could have an adverse effect on our business, financial condition, and operations67% rewritten
- 46Our intellectual property rights are extremely valuable and if they are not properly protected, our products, services, and brand could be adversely impacted
Risks Related to Ownership of Our Securities
- 47Our entry into the Markel Fronting Arrangement will reduce our reported commission revenue and ceding commission expense beginning in 2026 and reduce period‑to‑period comparability of our Consolidated Financial StatementsNew
- 48Our entry into the Markel Fronting Arrangement may not result in the commercial benefits we are expectingNew
- 49By the Board of Directors (the "Board")
- 50Under the 2021 Stock Incentive Plan37% rewritten
- 51Under the 2021 Employee Stock Purchase Plan34% rewritten
- 52Under the Contribution and Exchange Agreement27% rewritten
- 53Under the Securities Purchase Agreement20% rewritten
- 54Substantial blocks of our total outstanding shares may be sold into the market. If there are substantial sales of shares of our Class A Common Stock, the price of our Class A Common Stock could decline83% rewritten
- 55We qualify as, and have elected to be treated as, a "controlled company" within the meaning of the NYSE listing standards and, as a result, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies
- 56The dual class structure of our common stock may adversely affect the trading market for our Class A Common Stock
- 57The dual class structure of our common stock will have the effect of concentrating voting power with two stockholders, which will limit your ability to influence the outcome of important transactions, including a change in control
- 58Our three largest stockholders hold significant voting power, have the right to designate directors to our Board and are entitled to preemptive rights with respect to the issuance of new shares of Class A Common Stock, which provides these stockholders with significant power to influence our business and affairs
- 59Because we have no current plans to pay cash dividends on our Class A Common Stock for the foreseeable future, you may not receive any return on investment unless you sell your Class A Common Stock for a price greater than that which you paid for it
- 60Anti-takeover provisions in our organizational documents and applicable insurance laws could delay or prevent a change of control
- 61There is no public market for our Series A Convertible Preferred Stock
- 62The price of our securities may be volatile or may decline regardless of our operating performance and you could lose all or part of your investment as a result
- 63These broad market and industry fluctuations may adversely affect the market price of our Class A Common Stock regardless of our actual operating performance
- 64If securities or industry analysts do not publish research or publish inaccurate or unfavorable research reports about our business, or if they downgrade our stock or our sector, our stock price and trading volume could decline
Risks Related to Tax
- 65Hagerty, Inc. is a holding company, whose only material asset is its interest in THG. Hagerty, Inc. depends on THG distributions to pay taxes, make payments under the TRA, and pay other expenses33% rewritten
- 66Hagerty, Inc. is required to pay Legacy Unit Holders and any other party to the TRA for certain tax benefits we may receive and the amounts payable may be substantial
- 67To the extent we receive tax distributions in excess of our actual tax liabilities and retain such excess cash, the Legacy Unit Holders may benefit from such accumulated cash balances if they exercise their exchange rights
- 68We are subject to VAT and other indirect tax laws in multiple jurisdictions, and the complexity and interpretation of these rules could result in additional tax liabilities and compliance costsNew
Other Hagerty 10-Ks
- FY2024 10-K risk factors59 risks
Insurance underwriting, claims, reinsurance, carrier relationships, and regulation dominate Hagerty’s risk profile.
Filed Mar 04, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.